To a layperson, this might seem ludicrous because;

Everyone knows that high return equals high risk and who would pay top dollar for a high-risk strategy; and even with a high-risk strategy, 1,000% return or more, in a short period, smells like a scam!

There is however, one key aspect here, which changes everything; proof of historical performance, via MyFxBook. This is one of the most trusted platforms when it comes to verifying past performance of any trading account.

The reason for this obvious; faking it via MyFxBook isn’t easy. It might be possible, but trust and security must key aspects for MyFxBook so unless you are an educated hacker with inside info, you probably won’t stand a chance.

So a sales page for an EA, with amazing historical perofrmance, and a link to a MyFxBook account to verify the data, is basically a license to print money.

Unfortunately, the end user – the client purchasing the EA, often end up in a horrible situation;

– Paid lots of $$ for the EA
– Spend time going through instructions and settings things up
– Paid money for a VPS to have the EA running 24/5
– lost money as a result of the EA trading
– Confused and disappointed (at best) with this experience

But but but… The EA is supposed to make money – not lose them. Right? What’s wrong here.

Well, the good old rule of thumb that says; If something sounds too good to be true, it probably is” – that’s still true today, and specially in the Forex / EA market.

But how is this possible, when we have seen verified profitable historical performance on connected live account via MyFxBook?

Well, it might be close to impossible to fake the results on a MyFxBook account, but its very possible to fake the data going into your MyFxBook account.

If you, like the majority of all MyFxBook clients, is a “regular” retail trader with an MT4 account with one of the many brokers they support, you won’t be able to do this. The data from your MT4 account is basically mirrored in your MyFxBook account, and you won’t be able to amend this data in any way; in your MT4 account nor MyFxBook account. But your broker will.

But hows does this work exactly? The ones selling these outrageously “profitable” expert advisors, aren’t brokers – or are they?

Two options come to mind;
– Stat a brokerage with the sole purpose of manufacturing a trading account with a very profitable history and use this to sell an expert advisor.
– Connect with an existing broker and convince them to manufacture a profitable trading account.

Does this sound far fetched? Alright, well let’s take a look at one example that looks more than suspicious.

Expert Advisor: Broker Arbitrage

An EA hyped and promoted by everyone back in 2014. This EA was supposedly created by a guy named Mark Reid. It has an astonishing historical performance of 439,236%!

The account is still active, although no new trades have been entered for a long time. You can see the whole thing for yourself, right here. Below is a screenshot of the MyFxBook account where there are two details to pay attention to (indicated by the two arrows)

First of all note that the performance has only been going on way for the whole period up until august 2014; UP. Brokerarbitrage.com was according to internet archive, seen online for the first time, in the middle of September 2014. Note that this isn’t necessarily accurate, but certainly not too far off, either. Either way, the EA was being promoted just around August 2014, and right after this, the impressive performance came to an end, and started to drop.

Why is that? Well, you can fake historical data. But as soon as the first copy is sold, the client would expect to get the same or at least, very similar, deals executed on his platform. Because of this, the option to amend historical loosing deals into profitable ones, end with the first sale.

Another thing to note, is the broker connected to this MyFxBook account – Deutche Trading. I never heard about that specific broker before stumbeling upon the Broker Arbiteage EA. So I took a closer look and lo and behold, Deutche Trading has a Russian website – or, more correctly, Deutche Trading had a Russian website; not that its been chnged to a german one, its just been shut completely down. Funny thing is that the first time Dethcne Trading was around online, was jus a couple of months prior to the release of Broker Abitrage.

As mentioned above, the time this broker was seen online for the first time is suspiciously close to the released of the broker arbitrage EA. If you search for http://deutsche-trading.ru in the wayback machine (internet archive), you will see the following.

Not only was the broker created just shortly before the release of the EA Broker Arbitrage, but it was also shut down a couple of months later. Again, the stats from Internet Archive wont be completely accurate, but they do give us a hint as to what happened when.

Another factor that points us in the direction of this being a scam, is the forward test listed over at Forex Peace Army. You can see the test here. Now before you get too impressed with the results, make sure to read the fine print.

We appreciate BrokerArbitrage.com sharing their EA performance on a LIVE account with ForexPeaceArmy.com traders community!

Please address ALL questions regarding the settings of this EA to BrokerArbitrage.com support. The FPA is monitoring this EA using the investor password and has no access to the settings being used.

2014-08-11 Broker Arbitrage Real Test stopped by the FPA due to the questions raised regarding the previously unknown broker, Deutsche-Trading. The FPA has invited BrokerArbitrage to select a better known broker and submit a new test.

2014-06-04 Broker Arbitrage Real Test started with help of Investor Access.

The reviews listed over at ForexPeaceArmy goes hand in hand with all the details and basically highlight this as a definite scam.

Now if you think Broker Arbitrage is the only example with this kind of sketchy setup, you would be wrong. Keep in mind that even with a accurate historical performance, this isnt any indication of what is going to happen in the future – it’s merely data of what happened in the past.

If you are thinking about purchasing an Expert Advisor, make sure to doubble check everything before you pull out your credit card.

Have you ever been scammed with an EA? I would love to hear your story. Drop a comment below and share your thoughts.

Henry Liu – 10K to 1MM

Henry Liu has been involved with the commercial side of retails trading for many years. I cannot remember exactly when I heard about him for the first time, but it is several years ago. At first he used to run a site named something along the lines of FX News Wiz, where he sold forex signals. As far as I remember, this was the first time where he actually shared the thoughts of trading an account balance from USD 10,000 into 1 million USD within a period of short time. For some reason, the site was shut down, and a new site was opened, where Henry Liu sold his book on trading the news in the FX market; Newsprofiteer. Not too long after that he started a paid service where you could follow him, trading the news, live. Henry Liu’s next project was named 10K to 1MM; a paid (an expensive one, I might add) service, where Henry would show you his plan on how to trade an account with a balance of USD 10,000 into USD 1,000,000 over a period of 12 months.

The Plan For My Trading Formula Is Simple…

Our final goal is to reach the 1 million dollar level and we have specific daily plans. But the best thing of all is that we are going to take baby steps. It’s almost impossible if we were to try to make 1 million straight from a $10,000 account, it’s just a disaster waiting to happen… but I know if I were to tell you that “let’s try to make 1% return on your account today,“ you’d have no problem with that, I mean $100 a day in profit from a $10,000 account isn’t so tough… and by applying the same principles, I’ve divided the 10kto1mm plan into 12 phases or 12 periods. Each phase lasts about 30 days, and depending on market condition, it’s possible that we may complete a phase even before the 30 days.

– source

Things went bad and members who followed him started to get liquidated left, right and center. The 10K to 1MM program was “paused” (discontinued) in phase 2 and there has been no update since then.

Casey Stubbs – Winners Edge Trading – Explosive Growth Mentoring

Casey is the owner of the blog winners edge trading; a site that has been around for years with information on forex trading. Over the years we have seen several different programs, services and EAs from Casey Stubbs. The latest program from Casey Stubbs was named Explosive Growth Mentoring, where the plan was to rapidly build a tiny account into big figures. In the video presentation for the service, Casey guaranteed to double his account within the first month of running the service. That didn’t happen. In fact, the account used for the program was up over 4,000% (just not within the claimed month). But this dropped off a cliff in a matter of two days, going for 4,000% to -100% – This is what was shown on the connected MyFxBook account at least. In addition to this, there has been issues with the refund promised to clients. As Casey Stubbs didnt delivered on the on the promised gaurentee, clients of the “Explosive Growth Mentoring” program was intitled to a full refund – But getting that refund is seemingly more difficult than you would expect:

i had purchased the explosive mentoring program from winners edge trading on 27-11-2015, and paid 2500$ for it, casey stubbs had made a gurantee that he will refund us if he failed to double his account during three weeks time period, after he failed to do so i had claimed a refund , and they replied many times that they will process the refund request as soon as possible but till now three months had been elapsed and nothing happened, i urge you to review this case meticulously, and i will not close this complain till they refund me.

– source

SPM Capital Management Signal

SPM Capital Management was a signal / copy service by a guy named Steve. The whole setup was connected to a site named forexsignals.com. You can see the whole thread here. Steve promised clients and potential clients to follow a strict set of rules in his trading; one of his key points was never to have a drawdown of more than 15%

Maximum drawdown will not exceed 15%. Please note that the Maximum % Drawdown Allowed for this system is set at 15% within SimpleTrader.

After a period of time, a guy named Vlad highlighted SPM Capital Management as a dangerous and toxic trading strategy (which you can read more about here

Steve didn’t fancy these thoughts and posted the following in the forum:

Merry Christmas all from the Philippines where I’m currently enjoying a holiday visiting my wife’s family.

JLT is full of BS, and I would like to add that I’m now number 2 on MyFXbook Autotrade.

Also 100% gain per year is not inconceivable- I have stated in my bio that my target is 60% pa so I’m just doing better than expected.

I see JLT has a 1 month track record. I have been consistently profitable for the last 14 months.

I have a few trades open, but i’m taking a holiday and will be back in full force around the first week of January. However markets are quite at the moment and there is no reason to get into new positions now (apart from the GBPUSD short I have just taken as a medium term trade).

Hope you all had a great Christmas and wishing you all a Happy New Year!!

Thanks

Steve

Not long after this comment was posted in the forum did Steve’s account take a massive hit – needless to say, more than the max drawdown of 15%. Clients weren’t happy and Steve´s partnership with forexsignals.com ended.

The three examples highlighted here goes to show that in spite of promised, verified performance (or lack of same) and guarantees, things can easily and very fast go the wrong way! When this happens we are left with apologies and excuses, but what is that really worth, when you just threw you account balance down the drain?

Please share your own experiences with the sketchy world of forex trading programs and services.

In order to execute a transaction, traders have to go through an intermediary known as a broker. Irrespective of the profits or losses experienced by individual traders, brokers have to make money and they do this by charging commissions and fees, some of which are hidden. It is very important to understand how brokers are compensated as it can help a trader choose the best broker for their needs. In this article, we look at how Forex brokers, including ECN brokers and binary options brokers operate and the differences in the ways in which they make money.

Forex Brokers

Forex brokers work by taking orders to buy or sell currencies and executing them. In return for executing these buy or sell orders, a forex broker charges a commission per trade or a spread, and is the way in which they make their money. A spread is the difference between the bid price and the ask price for the trade. The bid price is the price a trader receives for selling a currency, while the ask price is the price they have to pay for buying a currency. The difference between them is the broker’s spread.

Brokers can also charge both a commission and a spread on a trade while some even claim to offer commission-free trades. In reality, these brokers usually make a commission by widening the spread on trades. Spreads can either be fixed or variable. With variable spreads, the spread will vary depending on how the market moves. A major market-moving event, such as an increase in interest rates could cause the spread to change. This may be either favorable or unfavorable to a trader. If the market gets volatile, a trader could end up paying much more than expected.
Another aspect to note is that a forex broker could have a different spread for buying a currency and for selling the same currency. Hence, a trader needs to pay close attention to pricing and be aware that there are several different kinds of brokers including market makers, STP and ECN brokers who all have their own commission or fee structures. Brokers who are well capitalized and work with a number of large foreign exchange dealers to get competitive quotes typically offer competitive pricing.

ECN Brokers

ECN brokers use an electronic communications network to put their clients directly in touch with other currency traders. They do this by linking the buyers and sellers to an automatic program which matches markets orders and then executes them.
As ECN spreads are much narrower than those used by everyday brokers, ECN brokers are compensated by charging their clients a commission per transaction on behalf of the traders.
When a trader has chosen his currency pair, an ECN broker provides them with an order book comprising ‘bid prices’ of buy orders, the total volume of the bid price, the ‘ask price’ of sell orders and the total volume of the ask price. All quotes come from the market participants and the ECN matches the best ones to each other and then displays them directly to the client.
As the service provided to clients by an ECN broker is simply to match trades between market participants, it cannot trade against the client and is thus compensated by imposing commission fees for each client’s transactions. The higher trading volume the broker’s clients generate, the higher the broker’s profitability. ECN brokers typically offer their clients competitive spreads as they are able to engage in sharing information with other brokers to establish the right price.
Binary Options Brokers
Binary options trading is another increasingly popular form of investment in the financial markets. Unlike the forex market where the brokers charge spreads or commissions, binary options brokers operate in a different way and actually make money through a variety of methods. One way is through the pricing of the binary options while the other is through the trading activities of their clients.

Binary options brokers usually obtain their pricing structures from their liquidity providers, however, some traders may not be aware that the pricing of the binary options that they are trading is actually marked up slightly from those in the market. Binary options traders tend to check out the prices of the asset displayed on the broker’s trading platform together with the expected payout, but those who scrutinise this more carefully will find that the expected payout is not calculated based on a true percentage payout. A certain percentage of the payout is actually retained by the broker and this constitutes the commission that the binary options broker is earning.

Another way in which binary options brokers make money is through the trading activities of their clients and cashing in on the money placed on losing trades. If a trader places a bid and predicts it correctly, they will receive their money back plus an extra 80% (not 100%).
On the other hand, if a trader places a bid and predicts it wrongly, they lose all their money invested in that trade. All this money goes to the broker, although in some cases, brokers will give the trader a small percentage back. Hence, brokers are compensated by pocketing the difference between the percentage that losers will lose and the percentage that winners will make.

Conclusion

As we have seen, brokers tend to charge on a commission or fee basis, but binary options brokers operate a different business model. It is, therefore, a good idea for traders looking to invest in the forex market to find out how their broker of choice makes money since their charges will inevitably affect their bottom line.
It is not only advisable to check a broker’s payment structure, but also their terms and conditions before proceeding in order to steer clear from those offering fraudulent get-rich quick schemes promising great returns. Each broker has its own quoting method and it is ultimately up to those who are undertaking transactions in the forex market to ensure that they are getting the best deal available.

If you plan on using one of the many EA´s out there, getting a new account with ThinkForex might not be such a bad idea. They have good reviews, fair rates, and if you plan on using an EA, you need a VPS – Why not get it free of charge?

All you need to do is open a new account with ThinkForex; make a deposit and send them an email to claim your free VPS. This will be free of charge for the first 60 days without any requirements on your behalf. After this period, you need to place a min. of 10 lots per month in order to continue with the free VPS. As an alternative, after the 60 days, you can simply pay the monthly fee of GBP 25.

Sign up with ThinkForex through CashBackForex and get commission on every single trade you take

The trading education is the first vital step you need to take if you want to achieve success in forex trading. It’s much better to invest time and money into a good forex trading course rather than losing a lot more learning by the error and trial method.

What Is A Good Forex Trading Course?

There are thousands of books, DVD packages, seminars, “home study” programs and e-courses promising you to help in achieving great trading success. As usual in life, only a part of the promises are really delivered.

A good trading course or seminar should meet at least the following requirements:

• Fast learning process. You are not going for University degree here, you need to learn fast and start trading. A good course will get you started in a couple of months
• Interactive Trading. You can’t expect this from a free course, but if you are paying, you should expect interaction between you and the instructors
• Cover The Basics of Technical and Fundamental Analysis. You can’t be a serious trader without having idea what these are.
• Identifying optimal entry and exit points. A good course will teach you how to know when is the best time to open and close positions.
• Outlined program. If you are going to invest your time and/or money into a trading course, you should know its program at the beginning. You have no resources to spend for surprizes.
• Money back guarantee. If the course is paid and the sellers are so sure it’s worth the money, they’ll be ready to offer money back guarantee.

The good course featuers are not limited to the above points. Many good courses will offer you personal coaching, sample trades and deeper technical analysis education.

Free Or Paid?

Usually people say that you get what you pay for. But to conclude that the free forex trading courses are worthless is a big mistake. There are a lot of quality free courses, especially for beginner traders.

The writers of those free course of course need to get some return of their work. To do this they often advertise a particular trading platform within the tutorial or course. While there is nothing wrong with that, you should be able to identify which course is created with the sole point to promote a trading service and which really contains value.

One important mark of a good free course is the lack of replication of common and widely known information. If the course has some unique angle and personal style, chances are it is good. If the course concentrates on how one single company trades or how a single trading platform works, it’s probably created only to advertise.

The paid courses usually provide better value, but of course there are pretty many crooks who just want to get your money. In addition to using the checklist from this article, you need to search the Web for reviews and opinion for the course you plan to enroll in.

Practice Is Important

The mistake which a lot of novice traders to is to read and study without applying the knowledge into practice. Then at the end they try to remember everything and start trading.

Practice while you study!

Open a demo account with a Forex trading company and start applying everything you learn in the course. This is not only the best way to see what works and what not, but also to memorize the most important things that you learn in the course.

Don’t stay at demo stage. If you always trade in demo, you’ll never really learn. You will have to invest some minimal amount and try trading for real. Doing it is much different than playing with virtual money. The emotions are important part of the game!

Check our reviews for some forex trading courses. No matter if you enroll some of them or another one based on your choice, let us know about your progress.

Unfortunately to achieve this you must first read big fat books on trading, technical and fundamental analysis and strategies. In addition you have to follow the news every day so you can take appropriate actions.

In the beginning most self traders stay on the PC all the day with red eyes and lose money with each mouse click.

What Are Trading Signals?

There are people who have already been there years ago. They have read the books, spent the hours learning, experienced trials and errors. They are now expert traders who regularly win more than they lose. They are professional traders.

Such people want to use their knowledge and earn more right now. They can make living by trading their own money, but why stop there? Would you refuse some extra income especially if you don’t need to lift a finger for that?

Those traders can take other people’s money to trade and get part of the profits. This is called managed account trading and there are many who do it.

Another option for them to make extra income is to offer stock, forex or options trading signals. The signals are being sent automatically when they perform a buy or sell trade on their own accounts. So they don’t need to do anything more except to set up the software and charge their clients.

What Can The Signals Do For You?

Obviously, they can save you time for education and following the news. You can just follow the trades that the expert makes and have the same profits (or losses).

Trading by signals requires only basic education how to work with the trading platform you have selected.

The trading signals allow you to trade like the professionals without having to go thru the “red eyes” stage. Now you can even drink your wine while trading.

The performance of the different traders and trading types vary. I have seen forex signals which can help you make more than 100% pure proift per year.

Depending on your leverage and margin, you can make or lose much more than the expert trader does.

How Much Do The Signals Cost?

Usually the prices are between $50 and $300 monthly, but I have seen traders asking for $1,000 per month. It’s wrong to assume that more expensive signals are better, but often it is true. Most signal services offer significant discounts if you subscribe for 3 or 6 months or a full year.

One important thing to consider when subscribing for a trading signal service is that your equity must be high enough to justify the costs. For example if you you pay $100 monthly for signals which averagely achieve 5% profit per month, you need to invest $2,000 in your trading account just to break even. Still this is much lower than the $25,000 or more minimum most managed account services require.

How To Find Good Trading Signals?

The business of making money and investing has always been full of dishonest people and companies. Unfortunately the trading signals are not an exception. Many companies report fake performance results just to get some subscribers.

One good place to check for proven services is our reviews page. I won’t list any service which is not confirmed by at least two independent sourses. In most cases I’ll have my own experience with the services as well.

If you decide to find signal services thru the search engines, make sure to do some basic due diligence. Type “service name” + review and “service name” + scam and see if there are complains posted on forums and other review sites.

This may sound like a dream, but is definitely achievable with Forex Capital Markets even if you are not a great trader yourself. Returns of 75% – 150% per year are not unheard in the Forex world – they can really be achieved with a good trading strategy.

But how could you do it?

You don’t really need to do it yourself. You can use the service of professional forex traders or systems with zero fraud risk. This is called a managed forex account.

What Is A Managed Forex Account In Simple Words

In short it is a contract saying that your funds will be traded in the forex market for which you pay a percentage fee of your profit. The performance fees vary, but usually are between 20% and 40%. The best thing is you don’t have to pay fees if you don’t make profits.

With the managed accounts you don’t need to understand forex at all. You are not trading anything yourself, but just collecting the profits. The traders trade your money. Their motivation to achieve great results is the percentage fee they take. If the traders lose or make no profits, they won’t get paid for their work.

“But then they may run away with my money!”

No, they cannot do it. You deposit your money with a third party forex broker service, the funds are in your name and only you can withdraw. It’s simple as that.

How To Get A Managed Forex Account

The application for a managed forex account is fairly simple if you follow the instructions given by the provider. There are some documents to be submitted and funds to be wired. Let me outline the main steps:

• Find a good managed forex account provider. Indeed this is the hardest part. There are hundreds of offers out there, but which one to choose? Many of them have too risky trading style and the risk of trading loss is too big. Others are too conservative and barely beat the bank deposits. You need the golden middle – traders which outperform the mutual funds, but don’t put your money at huge risks. There are such accounts and some achieve 100% + ROI per year. You can check out our reviews for such offers.
• Apply for an account. This is simple. Just follow the instructions they give you. There are usually two sets of documents that you need to fax or mail. One is for the managed account traders, the other is for the forex broker where your money will be traded
• Make sure that you deposit at a third party reputable forex broker! I can’t emphasis on this enough. There are fraudulent services on the Internet which claim to offer managed accounts, but in fact they take the funds themselves. You must deposit your money only on your name with a forex brokerage service and NOT in traders name or in some unknown e-currency account.
• Deposit the funds. Most managed accounts will require at least $10,000 or $25,000 minimum investment on your part and for some the threshold is even $250,000. If you don’t have such amount, you’ll need to consider another form of investing.

After these steps your funds will start being traded. You can only wait and watch the profits rolling in!

What are the risks?

Any investment involves a risk and that is especially valid about the companies which try to achieve higher returns on your money than the conventional investments. The forex trading is one of the riskiest financial activities and even an experienced trader can lose your money.

The good managed account providers have strategies to minimize the risks and limits about how large part of the money can be lost – even in theory. Avoid investing with traders which don’t offer serious risk management. Check our reviews to see some of the best managed account providers which are available at this time.

Forex market

The need to exchange currencies is the main reason why the Foreign exchange market is the largest in the world. That is why it is the most liquid market in the financial world. It dwarfs the other markets in the size of the transaction even the stock and commodities market. What you will discover is that you can open a Forex trading account at this or any other broker in the world as Forex has no central marketplace. The trading is conducted electronically and all the transactions are done electronically via the computer networks between the traders of the world. The Forex market is open 24 hours a day and all the days except the weekends. The currencies are traded worldwide in major financial centers which are London, Frankfurt, Tokyo, Zurich, Singapore, Sydney and Paris. The Foreign exchange market is thus extremely active any time of the day due to the fact that any international exchange is active any time you log into your account.

How Forex trading international is done?

It’s done simply through a Forex broker who allows you to trade currencies internationally. In order to start Forex trading, you have to take an account with a Forex broker. Search for a reliable, reputed and registered broker with a regulating authority. After finding a suitable broker, register an account with the broker. Nearly all the brokers provide a trading platform through which you can make trades online. With the trading platform you can read live Forex quotes, make analysis and perform the best trade based on the analysis you make. Many Forex brokers provide platforms through which you can make automated trades too.

There are Forex demo accounts through various brokers which help you to learn Forex trading international. It is a demo trading environment provided by the broker in which you trade with demo money which is not real. In this way you get the ability to trade in real like environment and test your strategies without losing any real money. After you are confident that you have are knowledgeable with Forex enough, you can jump to live trading account and start making profits.

Foreign currency trading provides a lot of benefits to the traders all around the world including high liquidity, 24 hour trading, easy account opening and trading on margins.